TBO.com - TBO is Tampa Bay Online

Home Depot Chain To Shutter 15 Stores

ADVERTISEMENT

By HARRY R. WEBER

The Associated Press

Published: May 2, 2008

ATLANTA - It's been 4 1/2 years since former Home Depot Chief Executive Bob Nardelli's bold prediction that the home improvement retailer could sustain "unlimited growth" without significantly affecting sales at established stores.

That statement was made during much better economic times.

The Atlanta-based company, under different leadership, a different growth philosophy and amid an ailing housing market, put the brakes Thursday on some of its expansion plans and said it would do what was previously unthinkable: close 15 of its underperforming flagship stores.

The stores Home Depot said Thursday it plans to close consist of three in Wisconsin, two in Ohio, two in New Jersey, two in Indiana and one each in Kentucky, Louisiana, Minnesota, North Dakota, New York and Vermont.

It is the first time the world's largest home improvement store chain has ever closed a flagship store for performance reasons. The move, to be completed within the next two months, will affect 1,300 employees.

The company reiterated its intention to open 55 new stores in the 2009 fiscal year, though it will no longer pursue the opening of about 50 U.S. stores that have been in its new store pipeline, in some cases for more than 10 years.

"By building fewer stores, in the best locations, and making sure our existing stores are profitable, our company will be in a much stronger competitive position," said CEO Frank Blake, who took over for Nardelli in January 2007.
Home Depot shares rose $1.17, or 4.1 percent, to $29.97 in afternoon trading.

Nardelli, now the chief at automaker Chrysler LLC, had other ideas on Nov. 18, 2003, when he told The Associated Press that The Home Depot Inc.'s robust new store growth would continue unabated and suggested the retailer may one day expand into Europe and Asia.

The company has added about 600 stores since then, but has scaled back new store growth in the past few years. Its only stores outside North America are a dozen in China, and those were obtained through an acquisition.

Some analysts and large investors have worried that as Home Depot gets bigger, it would put stores in direct competition with existing stores, a practice known in the industry as cannibalization.
Home Depot has never closed one of its flagship stores for performance reasons.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT